By Rob Otman
FactSet Research Systems (NYSE: FDS) is a midcap company that operates within the capital markets industry. Its market cap is $7 billion today, and the total one-year return is 3.74% for shareholders.
FactSet Research Systems stock is underperforming the market. It’s beaten down, but it recently beat earnings expectations. So is it a good time to buy? To answer this question, we’ve turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
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✓ Earnings-per-Share (EPS) Growth: FactSet Research Systems reported a recent EPS growth rate of 2.42%. That’s above the capital markets industry average of -6.76%. That’s a great sign. FactSet Research Systems’ earnings growth is outpacing that of its competitors.
✗ Price-to-Earnings (P/E): The average price-to-earnings ratio of the capital markets industry is 23.18. And FactSet Research Systems’ ratio comes in at 24.99. Its valuation looks expensive compared to many of its competitors.
✓ Debt-to-Equity: The debt-to-equity ratio for FactSet Research Systems stock is 74%. That’s below the capital markets industry average of 121.59%. The company is less leveraged.
✗ Free Cash Flow per Share Growth: FactSet Research Systems’ FCF has been lower than that of its competitors over the last year. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.
✗ Profit Margins: The profit margin of FactSet Research Systems comes in at 22.66% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. FactSet Research Systems’ profit margin is below the capital markets average of 28.6%. So that’s a negative indicator for investors.
✓ Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for FactSet Research Systems is 66.59%, and that’s above its industry average ROE of 18.98%.
FactSet Research Systems stock passes three of our six key metrics today. That’s why our Investment U Stock Grader rates it as a Hold.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth.
If you’re interested in finding Strong Buy stocks yourself, check out Fundamental Analysis Pro. It’s a free five-part mini-course that will teach you how to grade stocks like a Wall Street veteran. Click here to learn more. …read more
Source:: Investment You
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